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Cultural Imperial posted:I'm not sure what you mean. You linked an article saying that Canada's trade surplus is growing and hit a near-record high. You said this means the loonie would keep falling. Then you linked one of many sites linking trade deficits to currency devaluation (weakly, mind you). A growing trade surplus should probably cause the dollar to rise, not fall, unless you mean to imply that the surplus is bound to shrink soon.
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Sep 5, 2014 02:58
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eXXon posted:You linked an article saying that Canada's trade surplus is growing and hit a near-record high. You said this means the loonie would keep falling. Then you linked one of many sites linking trade deficits to currency devaluation (weakly, mind you). A growing trade surplus should probably cause the dollar to rise, not fall, unless you mean to imply that the surplus is bound to shrink soon. quote:For the trade deficit to turn into a surplus, imports must fall and exports must rise. One way this adjustment can take place is if the dollar depreciates, making imports more expensive for Americans and exports cheaper for foreigners. If trade deficits are sufficiently large and unsustainable, economists believe that they will be associated with a weakening dollar at some future date.
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Sep 5, 2014 03:05
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quote:For the trade deficit to turn into a surplus, imports must fall and exports must rise. One way this adjustment can take place is if the dollar depreciate A weak dollar leads to a trade surplus, not the other way around you idiot. And none of that has much to do with inflation, which is low and within target.
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Sep 5, 2014 03:19
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Whiskey Sours posted:A weak dollar leads to a trade surplus, not the other way around you idiot. And none of that has much to do with inflation, which is low and within target. Yeah I screwed that up. My bad.
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Sep 5, 2014 03:27
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Whiskey Sours posted:A weak dollar leads to a trade surplus, not the other way around you idiot. And none of that has much to do with inflation, which is low and within target. It can actually go both ways. For example strong mineral exports might occur in spite of where our dollar is and drive the dollar up as people seek CAD to buy Canadian mining production. Or alternatively as Canadian mining companies but Canadian dollars to pay expenses from US dollar revenues.
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Sep 5, 2014 04:02
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Cultural Imperial posted:Yeah I screwed that up. My bad. It's ok you're ethnic Han  Also get a load of this dude. quote:A lukewarm summer didn’t cool off Toronto’s red hot housing market which remains in sellers’ territory, according to the city’s realtors. The average price of a home in the country’s largest market continued to rise 8.9%...In the much sought-after detached home segment of the market, the average sale price [increased] 14.7%... Animals.
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Sep 5, 2014 04:07
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ongoing increases in year-over-year average sale prices.
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Canada loses 11k jobs. https://businessincanada.com/2014/09/05/canada-jobs-august-report/ How's this for tepid? 
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Sep 5, 2014 14:01
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^ And that's net - private sector employment fell by an order of magnitude more than that. Really. That's pretty bad.
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Sep 5, 2014 14:27
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Lexicon posted:^ And that's net - private sector employment fell by an order of magnitude more than that. Really. Yeesh. No wonder my wife is having a hard time finding work.
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Sep 5, 2014 15:37
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triplexpac posted:Yeesh. No wonder my wife is having a hard time finding work. What industry is she in and where do you guys live?
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Sep 5, 2014 15:44
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Oddly, Canadians seem to remain as bullish as ever on housing, yet are bearish on jobs and the economy in general. Herp derp
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Sep 5, 2014 15:50
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Cultural Imperial posted:What industry is she in and where do you guys live? We live in Toronto. She... isn't in any industry really, which is part of the problem. She has a BA in Fine Arts and no real qualifications. But this isn't my blog for my financial woes haha.
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Sep 5, 2014 16:03
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Lexicon posted:Oddly, Canadians seem to remain as bullish as ever on housing, yet are bearish on jobs and the economy in general. Housing prices are going up but jobs are going down. Duh.
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Sep 5, 2014 16:14
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triplexpac posted:We live in Toronto. She... isn't in any industry really, which is part of the problem. She has a BA in Fine Arts and no real qualifications. edit: get her to go into property management! Kafka Esq. fucked around with this message at 17:10 on Sep 5, 2014 |
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Sep 5, 2014 17:08
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https://businessincanada.com/2014/07/15/canada-housing-market-labour-market-diverging-real-estate-values-bubble/ Tldr; labour isn't tracking housing values in some parts of Canada because credit is easy to obtain.
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Sep 5, 2014 17:28
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As an American all this Canadian housing stuff fascinates me. I assume they learned nothing/didn't pay attention to what just happened south of the border, right?
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Sep 5, 2014 18:03
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axeil posted:As an American all this Canadian housing stuff fascinates me. I assume they learned nothing/didn't pay attention to what just happened south of the border, right? I think Flaherty (greatest finmin ever pbuh) and Carney were making GBS threads their pants after Lehman Monday and decided that this was the fastest easiest way to rescue Canada from the same fate of Europe and the US. In that respect, I don't think they chose the wrong path. What were the alternatives? Mass public spending? On the other hand, the stupidity and greed of Canadians has revealed itself in their personal spending habits. Maybe they would have thought twice about this strategy if they knew this fact.
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Sep 5, 2014 18:09
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Cultural Imperial posted:I think Flaherty (greatest finmin ever pbuh) and Carney were making GBS threads their pants after Lehman Monday and decided that this was the fastest easiest way to rescue Canada from the same fate of Europe and the US. Are the mortgages being securitized and sold in financial markets or will the damage just be limited to the housing market when this house of cards inevitably collapses? Anything like Fannie/Freddie in Canada?
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Sep 5, 2014 18:23
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axeil posted:As an American all this Canadian housing stuff fascinates me. I assume they learned nothing/didn't pay attention to what just happened south of the border, right? Of course not. Have you not clued into the extent of the massive Amero-superiority complex most folks up here have? Everyone here is a financial genius with their housing leverage and so on - not a fat stupid American. axeil posted:Anything like Fannie/Freddie in Canada? The CMHC, which is arguably worse: it has an explicit government backing. Mortgages with < 20% down payment require their insurance to be purchased, and if a debtor defaults, this insurance will make the banks whole if necessary (after the sale of the property). So basically the taxpayer will be cleaning up after all this, but even more explicitly and unambiguously than in America. Lexicon fucked around with this message at 18:33 on Sep 5, 2014 |
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Sep 5, 2014 18:29
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axeil posted:Are the mortgages being securitized and sold in financial markets or will the damage just be limited to the housing market when this house of cards inevitably collapses? Anything like Fannie/Freddie in Canada? Yes to both. Plus our banks love double dipping on credit by offloading securitized MBS's onto the market, then turning around and offering home owners a HELOC on the "value" of their home. Which in turn gooses credit usage, and is often used to pay down credit cards. Even if the banks had zero exposure to mortgage loans, they have ponzi'd up a massive pile of consumer credit that will all get torched first (because people default on all of their other loans before they default on a mortgage, as we saw in the States).
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Sep 5, 2014 18:29
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Franks Happy Place posted:Yes to both. Plus our banks love double dipping on credit by offloading securitized MBS's onto the market, then turning around and offering home owners a HELOC on the "value" of their home. Which in turn gooses credit usage, and is often used to pay down credit cards. This is the part that everyone forgets when they say the CMHC will cover the losses, so the banks will be fine even if there is a collapse. The amount of unsecured (by the government anyways) credit tied to housing is astronomical. Question: If you default on your HELOC, the bank takes your house right?
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Sep 5, 2014 18:36
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ocrumsprug posted:Question: If you default on your HELOC, the bank takes your house right? Yes. That's the whole point of securing the debt against the property.
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Sep 5, 2014 18:39
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Except that banks will be loathe to repo a bunch of lovely mortgages as collateral all at once, because then they have to sell them into the teeth of a tanking market. The same thing happened in states like Florida (which is a full recourse jurisdiction), the banks just stopped processing foreclosures out of sheer disinterest and a desire not to tank the market even further.
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Sep 5, 2014 18:42
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The virtue of continuing to pay the mortgage loses something, if you are technically in default on the property when you stop making your HELOC payments. I wonder how much pressure the banks will be under to foreclose the property anyways, in order to at least recover CMHC insurance. Particularly as the CMHC insulates the banks from the negative effects of tanking the market further. Hopefully when all is said and done, the wikipedia entry for Moral Hazard will include a note on the CMHC.
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Sep 5, 2014 19:00
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ocrumsprug posted:The virtue of continuing to pay the mortgage loses something, if you are technically in default on the property when you stop making your HELOC payments. I wonder how much pressure the banks will be under to foreclose the property anyways, in order to at least recover CMHC insurance. Particularly as the CMHC insulates the banks from the negative effects of tanking the market further. Does CMHC also cover the payments to the MBS holders after default or do the bondholders get hosed as well?
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Sep 5, 2014 19:18
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That's an excellent question.
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Sep 5, 2014 19:22
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Cultural Imperial posted:That's an excellent question. Yeah the crash will be considerably worse if the bondholders get hosed in addition to homeowners. In the US those two groups had a lot of overlap but the Fannie/Freddie bonds didn't go into default, just the private label garbage. And then there's the question of how CMHC actually covers repayment of defaulted mortgages. If it takes a few months to get the payments processed the banks might go under when they lose half their servicing income waiting for CMHC to pay up.
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Sep 5, 2014 19:32
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axeil posted:Yeah the crash will be considerably worse if the bondholders get hosed in addition to homeowners. In the US those two groups had a lot of overlap but the Fannie/Freddie bonds didn't go into default, just the private label garbage. And then there's the question of how CMHC actually covers repayment of defaulted mortgages. If it takes a few months to get the payments processed the banks might go under when they lose half their servicing income waiting for CMHC to pay up. Plus CMHC will pull out the magnifying glass (the government will force them to) and make sure every loan being brought forward for a claim was properly originated and there was no funny business. Since none of the banks do proper paperwork and their loans are a patchwork shitshow, the results will be hilarious. 
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Sep 5, 2014 19:37
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Franks Happy Place posted:Plus CMHC will pull out the magnifying glass (the government will force them to) and make sure every loan being brought forward for a claim was properly originated and there was no funny business. Are no-doc loans still a thing up there? I'm guessing the answer is yes.  I also find it hilarious that HELOCs are being given out like candy and used for daisy chaining rental properties. Here in the States a friend of mine just got a HELOC and he had to prove that he paid off his credit card in full and had literally no other debt other than his first mortgage. In return he got a puny $5,000 HELOC to redo his kitchen and he's unable to draw anything off it until he pays off all he borrowed originally. He had to send in something like 3 years of bank statements.
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Sep 5, 2014 19:47
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axeil posted:Are no-doc loans still a thing up there? http://www.onestopmortgage.ca/ axeil posted:I also find it hilarious that HELOCs are being given out like candy and used for daisy chaining rental properties. Here in the States a friend of mine just got a HELOC and he had to prove that he paid off his credit card in full and had literally no other debt other than his first mortgage. In return he got a puny $5,000 HELOC to redo his kitchen and he's unable to draw anything off it until he pays off all he borrowed originally. He had to send in something like 3 years of bank statements. Our banks are completely out to lunch. I've heard enough first-hand horror stories from bank managers et al to know that the exposure level is much higher than The Man is willing to admit.
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Sep 5, 2014 19:55
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 dear god. Why can't people learn?  Franks Happy Place posted:Our banks are completely out to lunch. I've heard enough first-hand horror stories from bank managers et al to know that the exposure level is much higher than The Man is willing to admit. Jesus Christ. I worked as a bank regulator for 3 years in the States and these are all the exact same things I heard people saying at the banks circa 2006-2007. Although back then they weren't concerned so I suppose the Canadian bankers have a step up on us Yanks there. Canada is so hosed
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Sep 5, 2014 20:02
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axeil posted:I also find it hilarious that HELOCs are being given out like candy and used for daisy chaining rental properties. Here in the States a friend of mine just got a HELOC and he had to prove that he paid off his credit card in full and had literally no other debt other than his first mortgage. In return he got a puny $5,000 HELOC to redo his kitchen and he's unable to draw anything off it until he pays off all he borrowed originally. He had to send in something like 3 years of bank statements. The government just changed the rules (maybe a year back now) that lowered the amount of HELOC you could qualify for. The banks are now only allowed to loan you 65% of your home value. What this means is that if I was middle class and lived in Vancouver, and had purchased a modest home in the 90's, and it was fully (or mostly) paid off, I could now qualify for a HELOC valued between $650K - $1.3M. Now as I am not a dummy with my finances I have no idea whether amounts of cash like that have ACTUALLY been thrown around. However, judging by the number of Audis parked in the various back alley's of Vancouver, there is some truth to it.
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Sep 5, 2014 20:08
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ocrumsprug posted:The government just changed the rules (maybe a year back now) that lowered the amount of HELOC you could qualify for. The banks are now only allowed to loan you 65% of your home value. Only 65%? Jeez. I don't know if there's a hard and fast rule here but I can't imagine a bank allowing your LTV to dip below 80% and due to cross-default risk I doubt they'll loan out more than 5-15% of the overall value of a home. And again, you're only getting a HELOC in the States if you have impeccable credit and can prove you already have a very limited debt load. Plus those with LTVs higher than 80 can't even apply. 65% is just begging for a default unless its reinvested back into the property via adding a new floor or some other massive renovation. How can underwriters be this stupid?
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Sep 5, 2014 20:13
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This is satire, right?
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Sep 5, 2014 20:13
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axeil posted:How can underwriters be this stupid? cash out whilst you can and gently caress the consequences
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Sep 5, 2014 20:21
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Cash out before the crash, buy into the depressed market, wash-rinse-repeat until your blood is 10% cocaine by volume.
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Sep 5, 2014 22:32
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axeil posted:I also find it hilarious that HELOCs are being given out like candy and used for daisy chaining rental properties. Here in the States a friend of mine just got a HELOC and he had to prove that he paid off his credit card in full and had literally no other debt other than his first mortgage. In return he got a puny $5,000 HELOC to redo his kitchen and he's unable to draw anything off it until he pays off all he borrowed originally. He had to send in something like 3 years of bank statements. I'm pretty sure the poster talking about daisy chaining HELOCs in the BFC thread is based in Boston. Yeah, here are the posts: Zero VGS posted:You know what's great... buying a condo for 68k, getting a Home Equity Line of Credit for 75% of the value, using that to buy a second condo in the building in cash, then moving into the second condo, calling a second bank and getting a second HELOC on that. Zero VGS posted:Some dump twenty minutes from Boston, it isn't anything special but everyone around here is "bad credit / no credit", lots of section 8 and immigrants. Hence the rents are disproportionately high, supply and demand I guess. Some fuckface named Steve Winn is trying to build a casino here which is supposed to turn our economy around, but it'll probably just create more traffic and crime than we already have to make the rich richer.
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Sep 5, 2014 22:45
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LemonDrizzle posted:This is satire, right? Nope. It's an accredited business and everything. 
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Sep 5, 2014 22:45
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Lead out in cuffs posted:I'm pretty sure the poster talking about daisy chaining HELOCs in the BFC thread is based in Boston. Yeah, here are the posts: am I reading that wrong or is this person seriously advocating turning him/herself into a slumlord while accusing someone else of profiteering off the poor?
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Sep 5, 2014 23:38
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LemonDrizzle posted:This is satire, right? It's actually a more legit brokerage than a lot of the ones that advertise on the radio. I don't listen to the radio, like, ever, so I just couldn't remember any of the really hilarious/egregious ones. But yes, the mortgage and home-loan market is a shitshow.
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Sep 5, 2014 23:46
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